Legislative Session Coverage

TALLAHASSEE (CBSMiami/NSF) — After a proposed settlement agreement touched off two days of high-stakes maneuvering, the state Public Service Commission will go ahead Monday with a hearing about whether Florida Power & Light should raise base electric rates.

Commission Chairman Ronald Brise late Friday issued an order rejecting a request to suspend the hearing. FPL and three groups of large power users proposed the settlement agreement Wednesday afternoon and also asked for a suspension, as they hoped to get a decision on the settlement by the end of August.

But Brise’s order said the rate case began in January and that the hearing, which is scheduled to last as long as two weeks, had been scheduled since March. He also said the commission is not required to rule on the proposed settlement before listening to testimony and gathering evidence during the hearing.

“Given the significant time, effort and expense that has been expended to date, as well as the monumental task of rescheduling such a complex hearing … I find that the joint motion to suspend shall be denied,” Brise wrote.

FPL early this year proposed a $690.4 million base-rate increase that would start to take effect in January 2013. The proposal drew opposition from representatives of consumers and business groups, at least some of which argued FPL’s rates should decrease — not increase — by $253 million.

But FPL and three of the groups, the Florida Industrial Power Users Group, the South Florida Hospital & Healthcare Association and federal agencies that are large electricity users, started a frenzy Wednesday when they proposed the settlement and requested suspension of the hearing. The proposed settlement would lead to about $548 million in rate increases next year, with residential customers picking up a large part of the tab.

The state’s Office of Public Counsel, which represents consumers in utility issues, and the Florida Retail Federation said they will fight the proposed settlement. But they also filed a document Friday agreeing that the hearing should be suspended to provide time to deal with the proposed agreement, which they described as the “elephant in the room.”

The public counsel and the retail federation, which frequently intervenes in utility cases, said it “makes no sense to proceed with the hearing” scheduled for Monday until the commission makes a decision on the proposed settlement.

Base-rate cases involve highly complex financial and technical information, and Brise’s order said 36 witnesses are scheduled to appear during the hearing. Also, earlier Friday, the commission filed a mammoth pre-hearing document that indicates it will have to resolve 193 issues in deciding the case.

Adding another twist, the retail federation Friday afternoon offered another proposal for settling the case — and substantially reducing the increase FPL could receive. The proposal would keep FPL’s base-rates flat in January 2013, though the utility would be able to receive increases later in 2013 and in 2014 when new power plants start operating at Cape Canaveral and Riviera Beach.

The federation’s proposal does not detail how large those increases would be, but FPL has previously sought $170 million for the Cape Canaveral project.
“The FRF is filing this offer of settlement with a spirit of transparency and openness and in a sincere effort to resolve the parties’ differences without further adversarial proceedings,” the federation proposal said.

Public Counsel J.R. Kelly said his office would have to fully evaluate the retail federation proposal.

“At first blush, it certainly is more palatable to us than what Florida Power & Light and the other three parties have thrown out there,” Kelly said.